Correlation Between First Majestic and Kaufman Et

Can any of the company-specific risk be diversified away by investing in both First Majestic and Kaufman Et at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First Majestic and Kaufman Et into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Majestic Silver and Kaufman Et Broad, you can compare the effects of market volatilities on First Majestic and Kaufman Et and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in First Majestic with a short position of Kaufman Et. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and Kaufman Et.

Diversification Opportunities for First Majestic and Kaufman Et

0.59

Correlation Coefficient

First Majestic  Kaufman Et

Very weak diversification

The 3 months correlation between First and Kaufman is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and Kaufman Et Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Et Broad and First Majestic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on First Majestic Silver are associated (or correlated) with Kaufman Et. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Et Broad has no effect on the direction of First Majestic i.e., First Majestic and Kaufman Et go up and down completely randomly.

Pair Corralation between First Majestic and Kaufman Et

Assuming the 90 days trading horizon First Majestic is expected to generate 3.72 times less return on investment than Kaufman Et. In addition to that, First Majestic is 2.03 times more volatile than Kaufman Et Broad. It trades about 0.01 of its total potential returns per unit of risk. Kaufman Et Broad is currently generating about 0.04 per unit of volatility. If you would invest  2,487  in Kaufman Et Broad on October 11, 2024 and sell it today you would earn a total of  748.00  from holding Kaufman Et Broad or generate 30.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

First Majestic Silver  vs.  Kaufman Et Broad

First Majestic Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Majestic Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, First Majestic is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Kaufman Et Broad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaufman Et Broad has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Kaufman Et is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with First Majestic and Kaufman Et

The main advantage of trading using opposite First Majestic and Kaufman Et positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, Kaufman Et can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kaufman Et will offset losses from the drop in Kaufman Et's long position.

The idea behind First Majestic Silver and Kaufman Et Broad pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.